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Transcript of part of a press conference: Sydney: 10 May 1970: [visit to Japan and USA]



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TRESS ; MINISTER FUR L;.;:

STAT E M E N T PRIMARY INDUSTRY

Transcript of tart of a Press Conference given by the Minister for Primary Industry, Mr. Anthony, at Sydney on Sunday, 10th May, 1970 on his return from visits to Japan and the United States

Q. Mr. Anthony, I am not a rural journalist, but looking at your statement, you've said many times that... well the Japanese have said that there is no collusion on prices and that you believe that has been repeated through and through and through.

MIL ANTHONY: I said I accepted it.

Q. And you accept it, sorry, my apologies. Do you think you'll find the same level of acceptance from the man on the land?

MR. ANTHONY: No, I don't think that for one moment. I think generally with Australians there is a high degree of suspicion. Normally with any buyer, any trader, he's out to get the best deal he possibly can. I've sold cattle and pigs in my life and I know what trading is; you're trying to get the best possible deal you

can. I imagine the Japanese would try to get the best possible deal they could too. But I doubt very much whether they can -and particularly after talking to them - manipulate the wool auction system to their advantage. And the people I spoke to were very influential people, important people in the Japanese wool industry, and I don't think they would tell me a lie. I

think what they told me was fact. I am quite sure with other commodities, -where you negotiate, the Japanese will play one person off against another; try to pressure the price down, But I can't see this with wool and I am quite sure they're genuine about their

concern for the future supplies of wool. And a policy of depressing the price to the low levels that exist now is not in their long-term interest. There is a mutual acceptance that if there is to be an assured future for wool, then the woolgrower has to have a profitable income and the manufacturer of the raw material must be assured of continuing supplies. And the Japanese wool spinner and wool importer knows there is a great deal of concern and trouble in Australia amongst woolgrowers because of the low prices. Naturally they don't want to pay any more. They've got their problems with increasing labour and somewhat of a slack market amongst the consuming public around the world at the moment. But really, if we're going to maintain a wool industry,

some means has got to be found for lifting the income of the Australian woolgrower. And I am of the firm belief that we've got to do more than our present system. le've got to try to get the most we can out of the market. We're not getting the most

we can out of the market by putting poor quality wools on the market - many grades of wool that would be better burnt than marketed. And I think at times there is a need for a degree of supply management when there looks like an over-abundance of a

certain type of wool coming on the market. Now, having said that, I know that any marketing authority would have to work very cautiously and with a great deal of wisdom to prevent cumbersome

stockpiles developing, and this could be adverse to the industry. I really think it's time we got stuck into this question and moved in a much more positive way than we've been doing in the past.

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Q. You are pretty well aware, I imagine, of the words

in the past week or so of the International Wool Textile Organisation who have virtually said: "Let's leave the system the way it is at the moment." And of course you've met this reaction in Japan. But even so, we've got to try and change the

system that we've got at the moment?

MR. ANTHONY: I'm certain we've got to change. I've got no doubts about this. The Japanese wool spinners and wool importers were quite emphatic that they wanted the auction system to remain. They felt it was the best way for rapidly determining the value

of different types of wool. But I imagine it's the sort of system they're used to. They know how it's going to work and they feel it is not being used against them. But we have got to look after our interests and I think we've got to control it more than we've been doing in the past. This laissez faire policy of just putting any type of wool on the market and letting it find any price is not good enough in the sophisticated merchandising world we live

in today.

Q. And so you feel the move towards a single marketing

authority is the only solution?

MR. ANTHONY: Well, I don't quite know what the industry means by a single marketing authority. I don't think they do either. This can have a wide range of different interpretations. And I explained to the Japanese the various interpretations that could be put on it, with the ultimate being complete acquisition of the Australian clip and sale by negotiation, and with reserved prices on it, and that there then would have to be Government involvement in it to give it financial backing. This wasn't sweet music to the ears of the Japanese, but behind it all I think they recognised that something is going to happen and possibly will have to happen if the Australian wool industry is to continue to survive.

Q. So, in other words, you feel that the moves by the

Japanese wool textile industry and the International Wool Textile Organisation are just opposition to change, change for change's sake?

MR. ANTHONY: I think so. I think that if you are a customer purchasing something, you are always fearful of change. But at the same time we should not ignore their reaction. This was the basic reason I wanted to talk to them. I wanted to build up a

closer relationship to them so that when problems do arise we can confer with one another. And they were most appreciative of the opportunity of meeting with me. It is the first time an Australian Minister has even spoken to the Japanese wool industry, and when you think that they at the moment are purchasing one— third of our clip and within five years will be purchasing half of the clip, it's unbelievable to think that things have drifted on for so long. I think there has got to be a tighter, closer working relationship with such a very big customer as we've got, and we don't want to act in such a way that it's going to be disastrous to them, because it will be disastrous to us. Somewhere between there has to be a•compromise whereby we can maintain a healthy and stable wool industry in Australia.

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Q. Can I take you to the paddock for a moment - Horsham,

Dubbo or Longreach, or Kojinup. What in essence is to the man in the paddock there would you say your trip to Japan means?

IE. ANTHONY: The lesson I would like to get across is that the low prices at the moment aren't due to collusive buying on the market. I had my doubts before I went. I thought this could have been one of the reasons for it. I don't believe it is now. I think there are a number of other factors that have been affecting the price and I have mentioned these to you this morning - the competition, particularly from synthetic fibres, and the high cost

of money, the pressure this is having on stockpiles of wool around the world, the effect this is having right along to the consumer at the end and the general increase in costs th€:^t are taking place

in the wool industry. But I think the other important lesson I got out of it was the confidence that the wool manufacturer, the wool spinner and weaver have in the future of wool to meet the competition of synthetic fibres. They believe that this is a premium fibre; that there's a good market for it. And provided we both work together sensibly, I feel there is a future for wool for the next 20 years. I don't think that synthetics are going

to knock wool out. They haven't found a suitable substitute for it. I thought it was most interesting in Japan, where one of the big markets for wool there is in the manufacture of kimonos. This is a ceremonial dress that the Japanese women wear and they're

coming back into fashion more and more. They used to be made of silk. They're very expensive garments. Now they're using wool to a large degree, but they're very particular that they have a fibre that is comfortable to wear, that has a 'feel' about it. And you can't get this, apparently, from any of the synthetics.

Q. Can I switch to wheat and ask you, in essence here,

what are the lessons from the talks in Ottawa for the Australian wheat grower in Western Australia or the Darling Downs?

MR. ANTHONYo Well, I think one of the important jobs I managed to do while I was in Ottawa at this international meeting of ourselves and the other four major wheat producers in the world was to let them know that we're making strenuous efforts to try to reduce our stock-holdings of wheat and to regulate production, or balance it to available market outlets. This message really hadn't got through to the rest of the world. In the United States and Canada they've really been having to adopt very stringent measures to curb the ever-increasing stockpiles of wheat. Over the last 12 months the stockpiles of wheat around the world have gone up by 900 million bushels, and this is causing great alarm to all the wheat-producing countries. And we recognise that the problem isn't just one of marketing wheat, but it's also a problem

of trying to rationalise the production of wheat. Unless all countries are prepared to co-operate in this, the pressures of the stockpiles of any one country are going to break down any semblance of orderly marketing of wheat around the world. It would be crazy to depart from the present I.G.A. arrangements where we're trying to maintain a price. The capacity, particularly

of Northern America, to produce additional grain is just collosal. Canada, if it were to lift controls, could double its production in any one season. They could have a billion-bushel crop without any effort at all. They've had controls, quota controls there,

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for many, many years. wheat are building up stringent measures no'

Q. Are you Australians, not only cut back more?

But even with these, the stockpiles of on the farms and they've got to adopt more ^r.

saying that the same thing must happen to this season but next season — we've got to

MR. ANTHONY: I think we're not doing too badly. We certainly haven't got ourselves into the predicament that the United States or Canada has with the huge stockholdings and the severe controls that they have had in the past two years. As I pointed out, we

have introduced measures to limit our produc-tdon or our deliveries by a cut of 40 per cent. That was measured against the peak of 1968/69. 1 think we may be able to hold this position, where we are now, without any further cuts. I think one will have to look at the world situation and our next season's crop and our stockpiles

later this year. But the world situation looks a little brighter this coming year. The stockpiles are only going to go up by about 200 million bushels in 1970, it appears that then they will start to decrease, provided all countries hold these controls.

Q. you won't speenlate as to whether we will have to

cut back more in Australia next year?

14TR. ANTHONY: No, I think we're getting into balance now. There

might have to be a slight cutback, but I hope that we have gone far enough.

Q. You and Mr. McEwen have always said that you want the

International Grains Arrangement, which comes up for review again next year, to continue. Did you find that all the other major wheat countries want to do the same thing, for it to continue? Or was there opposition to it from the European Common Market?

R. ANTHONY: I don't know whether it would be right to say that there's opposition, but there was an indifference to it by the E.E.C. countries, and whilst we didn't provoke the United States' attitude on this at the moment — because of the . Farm Bill going through Congress we thought it was unwise to do it — there's quite a lobby in United States that would like to see America out of the

I.G.A. However, the responsible people in the Administration realise the wisdom of this, and I hope the United States will continue as member of it. This matter will be discussed later this year. It's been agreed that there should be another ministerial meeting about the end of this year, and I would think that would be the opportune time to start thinking about the future of the

I.G.A., which will have to be renegotiated from the middle of next year.

Q... Talking with responsible people in the United States, did the Secretary of Agriculture, Mr. Hardin, give you any indication that he might take a bit more beef from us this year?

MR. ANTHONY. Nell, we had quite a session on beef. I don't know whether it's an opportune time to be talking much about beef. As a matter of fact, we delayed the grain conference for about an

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hour one morning while Mr. Hardin and I went through the throes

of talking about meat, he telling me of the problems that he has in Congress with his meat lobby and the opposition there, particularly in relation to the inspection standards that his department is applying to Australian meat. There is a great deal of concern in relation to mutton and the high rejection rate that has taken place, and he told me that I can expect a bit of trouble in this direction. So all I can say is that there was a lengthy discussion on that matter.

As far as taking a bit more meat -- he informs me that the inflow of meat for the first six—month period of this year looks to be running ahead of the quota arrangements and in July he is going to have to make an assessment of whether the

trigger mechanism should be applied. This will, of course, tend to roll back the quota and reduce what countries could possibly get into the United States. This wasn't very pleasant news for me to hear either. So there's certainly going to have to be some

stiff talking and negotiations between myself and the Meat 3oard and the American Administration about a number of matters with meat. They're just a few I have mentioned.